Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

Another economic downturn is just a matter of time

Posted by hkarner - 15. Oktober 2018

Date: 13-10-2018
Source: The Economist

It will be harder to fight than the last one, says Ryan Avent

JUST SOUTH of Indiana’s border with Michigan lies the city of Elkhart, with a population of just over 50,000. Apart from a small, shop-lined high street near where one river, the Elkhart, flows into another, the St Joseph, the city is mostly shapeless, tree-lined and suburban. Scattered around the outskirts are the factories of several of America’s largest producers of recreational vehicles (RVs). Rows of the finished products rest outside the giant sheds in which they are made.

Modern RVs are impressive, leather-upholstered land yachts fitted with flat-screen televisions and gas fireplaces, the perfect vessels in which to navigate the American continent. The RV business is one of the economy’s most strongly cyclical. Sales of big-ticket items like homes and cars inevitably rise and fall with the business cycle, but RVs are especially susceptible to such swings. It is only once cars and homes have been upgraded that consumers consider splashing out on rolling living quarters. And when financial fear stalks the land, RV-makers have a particularly hard time.

In Elkhart, more than a quarter of people in employment work on RVs. When the global financial crisis in 2007-08 plunged the world economy into its worst downturn since the 1930s, employment in the city’s factories fell by nearly half. The unemployment rate almost quintupled, to 20%. Incomes and population dropped. Elkhart was among the first places President Barack Obama visited after his inauguration in 2009: it exemplified the extraordinary economic challenge facing his administration. Den Rest des Beitrags lesen »

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Next time will be different: In fighting the next recession, politics will be crucial

Posted by hkarner - 15. Oktober 2018

Date: 13-10-2018
Source: The Economist

But are political leaders able and willing to co-operate?

IN THE DARK days of the Great Depression, the balance of economic terror was measured out in movements of gold from one country to another. Physically, though, the gold more or less stayed put. Most central banks kept their gold in the vaults of the Bank of England. Flows were accomplished by placing gold bars on a trolley and wheeling them from one pile to another a few feet away. Told that the economic cataclysm was the product of too much gold on one side of the vault rather than another, Britain’s ambassador to Germany sighed: “This depression is the stupidest and most gratuitous in history.”

Once again, the world is at risk of bumbling into an unnecessarily painful economic mess. If the next global slump takes a turn towards the catastrophic, it will not be because of a dearth of ideas for how to pry an economy out of a rut. Rather it will be because politicians given a long list of ways to pump money into an economy badly in need of it proved unwilling or unable to choose any. Sadly, such an outcome is all too real a possibility. Den Rest des Beitrags lesen »

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Approaching the summit: Filling in the gaps in the Brexit deal

Posted by hkarner - 14. Oktober 2018

Date: 11-10-2018
Source: The Economist

The chances of an agreement have risen. But getting it through Parliament will be a huge challenge

THERESA MAY certainly has her downs and ups. The prime minister bounced back from last month’s humiliating rejection of her “Chequers” plan for Brexit by European Union leaders in Salzburg, to what felt like a relative triumph at the Tory party conference in Birmingham a fortnight later. Next she will go to Brussels for an EU summit beginning on October 17th, widely trailed as the crunch moment for Brexit. Despite Salzburg, the mood music has improved. But time is running out, and rebellious MPs could yet blow up any deal.

For all the rebuffs to Chequers at home and from the EU, Mrs May’s advisers are quietly confident. Their reasoning starts from the point that the immediate negotiation is not about Chequers or future trade relations at all, but about a withdrawal agreement. Almost all of this is settled, except for the hardest part: a “backstop” designed to avert controls at the Irish border under any circumstances.

The principle of the backstop was accepted by Mrs May last December. Yet putting it into practice has proved tricky. The EU wanted Northern Ireland to stay in a customs union and in regulatory alignment with the single market, implying a border in the Irish Sea. Mrs May, backed by the Northern Irish Democratic Unionist Party (DUP), on which her government relies for support, roundly rejected this. Her Chequers plan proposed instead that the entire United Kingdom stay in alignment with the single market for goods, with customs controls avoided by fanciful high-tech wheezes. But the EU said no. Den Rest des Beitrags lesen »

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Marine Le Pen is hoping to come top in next year’s Euro-election

Posted by hkarner - 14. Oktober 2018

Date: 11-10-2018
Source: The Economist

After a poor showing last year, the nationalists are resurgent

LESS THAN 18 months ago, Marine Le Pen was beaten and exhausted. She had lost the French presidential run-off to Emmanuel Macron, after a wild-eyed debate performance that left her fans aghast. Her leadership of the National Front, a party of blood-and-soil populists, was strained, and she was said to be depressed. Within months, she lost her closest ally, Florian Philippot, and found her party’s French bank accounts unexpectedly closed.

Yet there she was in Rome on October 8th with a new glint in her eye. Alongside Matteo Salvini, Italy’s interior minister, a beaming Ms Le Pen railed against “totalitarian” Europe and proclaimed the start of a new “history with a capital H”. Populism and nationalism may have been defeated at the ballot box in France in 2017. But Ms Le Pen is hoping that next May’s elections to the European Parliament will show that her party, renamed the National Rally, is still a force to be reckoned with.

Thanks to a turnout that is usually low, and the opportunity for a low-risk protest vote, the French far right has often done well at European polls. In 2014 the National Front came out on top in France, with 25% of the vote. Next year’s ballot will be the first mid-term electoral test for Mr Macron. After a summer of poorly handled scandals and offensive remarks, the president’s popularity ratings have tumbled. This week Mr Macron was struggling to reshuffle his government, more than a week after his interior minister, Gérard Collomb, resigned after complaining that the president lacked humility. Next May’s election will be “very complicated”, says one of his deputies. “The risk is that the vote turns into a referendum on him.” As it is, one poll puts Ms Le Pen’s outfit neck-and-neck with Mr Macron’s La République en Marche, on about 20%, comfortably ahead of all other parties. Ms Le Pen could well come out on top again. “The populist wind is blowing everywhere,” warns Xavier Bertrand, president of the Hauts-de-France region, who beat Ms Le Pen to that job in 2015. Den Rest des Beitrags lesen »

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Europe’s history explains why it will never produce a Google

Posted by hkarner - 13. Oktober 2018

Date: 11-10-2018
Source: The Economist: Charlemagne
Subject: Waiting for Goodot

The digital desert

ON SUNNY evenings in Brussels, young Eurocrats mingle on the bar terraces of the Place du Luxembourg outside the European Parliament. The continent’s future leaders pay little heed to the bronze-green statue of John Cockerill at its centre. The Englishman commemorated at the heart of today’s EU moved to Belgium from near Manchester in 1802, importing the latest steam technologies. He founded a machine factory in a chateau near Liège which grew into an industrial empire and helped make Belgium second only to Britain in industrial sophistication.

Is Europe living up to Cockerill’s legacy? The continent has world-class companies in fields like biotechnology, luxury cars and nuclear energy, manufacturing sectors incorporating sophisticated software (a BMW these days is as much a computer on wheels as a car). London, a global tech hub, is home to DeepMind, a leading artificial intelligence (AI) outfit; Stockholm is home to Spotify, a dominant music-sharing service; Cambridge-based Arm makes processor chips for almost all the world’s smartphones.

Yet still Europe lacks large firms in areas like social media, e-commerce and cloud computing comparable in scale to America’s Google and Microsoft, or China’s Alibaba and Baidu. Of the world’s 15 largest digital firms, all are American or Chinese. Of the top 200, eight are European. Such firms matter. They operate dominant online platforms and are writing the rules of the new economy in the way Cockerill’s innovations did in his day. Den Rest des Beitrags lesen »

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The next recession

Posted by hkarner - 13. Oktober 2018

Date: 11-10-2018
Source: The Economist

Toxic politics and constrained central banks could make the next downturn hard to escape

JUST a year ago the world was enjoying a synchronised economic acceleration. In 2017 growth rose in every big advanced economy except Britain, and in most emerging ones. Global trade was surging and America booming; China’s slide into deflation had been quelled; even the euro zone was thriving. In 2018 the story is very different. This week stockmarkets tumbled across the globe as investors worried, for the second time this year, about slowing growth and the effects of tighter American monetary policy. Those fears are well-founded.

The world economy’s problem in 2018 has been uneven momentum. In America President Donald Trump’s tax cuts have helped lift annualised quarterly growth above 4%. Unemployment is at its lowest since 1969. Yet the IMF thinks growth will slow this year in every other big advanced economy. And emerging markets are in trouble.

This divergence between America and the rest means divergent monetary policies, too. The Federal Reserve has raised interest rates eight times since December 2015. The European Central Bank (ECB) is still a long way from its first increase. In Japan rates are negative. China, the principal target of Mr Trump’s trade war, relaxed monetary policy this week in response to a weakening economy. When interest rates rise in America but nowhere else, the dollar strengthens. That makes it harder for emerging markets to repay their dollar debts. A rising greenback has already helped propel Argentina and Turkey into trouble; this week Pakistan asked the IMF for a bail-out. Den Rest des Beitrags lesen »

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The Trump administration is right to redefine relations with China

Posted by hkarner - 13. Oktober 2018

Date: 11-10-2018
Source: The Economist: Lexington

It is also very bad at managing them

THE National Security Strategy released by President Donald Trump’s administration last year augured a major change in China-US relations. Where its predecessors lauded the merits of co-operation with the emerging superpower, Mr Trump’s document promised competition and resistance to Chinese trade and other abuses. The tirade Mike Pence launched against China last week doubled down on that commitment. In a speech delivered at the Hudson Institute, a short walk from Congress and the ongoing Kavanaugh brouhaha, the vice-president castigated the Chinese for bullying investors, buying allies with cheap loans, “tearing down crosses” and much else. This may turn out to be Mr Trump’s most significant mark on the world. America’s new adversarial posture towards China is overdue, popular and probably irreversible.

That is notwithstanding the fact that the vice-president’s speech was in some ways cynical and reckless. Much of it seemed to have more of an eye on the mid-terms than the world. “To put it bluntly, President Trump’s leadership is working,” he purred. Mr Pence then parroted his boss’s recent, probably bogus, claim that Chinese “covert actors, front groups and propaganda” were spreading more disinformation in America than the Russian spies to whom Mr Trump may owe his job. He gave no sense of which Chinese affronts he considered most grievous. He therefore offered only a glint of a counter-strategy. It was disorientating to witness such tawdry politics at such a potentially momentous moment. Conversely, it was a useful reminder, in Trump-drunk Washington, DC, that some things are bigger than Mr Trump. Den Rest des Beitrags lesen »

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Which countries are raising the most productive humans?

Posted by hkarner - 12. Oktober 2018

Date: 11-10-2018
Source: The Economist

Two indices measure human capital using gauges of health and education

DESPITE their dour reputation, economists frequently play with metaphor and simile, just like literary folk. One familiar example is “human capital”, as Deirdre McCloskey of the University of Illinois has pointed out. Economists have been likening knowledge, skill and stamina to physical capital, such as plant and equipment, since Adam Smith, who counted “the acquired and useful abilities” of a country’s people as one of several kinds of fixed capital, alongside “useful machines” and “profitable buildings”.

But unlike poets, economists prefer to quantify their analogies—to measure whether thou art 15% or 20% more lovely and more temperate. In that spirit, the World Bank this week unveiled a new measure of human capital for 157 countries. Its index combines five indicators of health and education (including the chances of dying before the age of five and between the ages of 15 to 60, the chances of stunted growth, the years of education an average child will complete by age 18, and the score they can expect on school tests) to measure how much human capital a person born today is likely to accumulate. It follows a similar measure for 195 countries from the Institute for Health Metrics and Evaluation (IHME) published in the Lancet, a medical journal, in September. Den Rest des Beitrags lesen »

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The Jungle Grows Back: America and Our Imperiled World

Posted by hkarner - 10. Oktober 2018

Date: 04-10-2018, The Economist
Source: Robert Kagan

We now live in a world:

„Where once people believed that the nation-state was a thing of the past in an increasingly cosmopolitan and interconnected age, we now see nationalism and tribalism reemerging, more than able to hold their own in the brave new world of the Internet.

Meanwhile, a profound and extended crisis of confidence besets the democratic world, even in the birthplace of modern democracy.

Liberal international institutions like the European Union, once considered the vanguard of a postmodern future, are now under assault from without and within.

In America, racial and tribal forces that have always been part of the “subterranean stream” of American history have reemerged to reshape politics and society.

Where thirty years ago the dreams of Enlightenment thinkers going back three centuries seemed to be on the cusp of fulfillment, today a Counter-Enlightenment of surprising potency stirs in Moscow, Budapest, Beijing, Tehran, and Cairo, in parts of Western Europe, and even in the nation that saved liberalism seventy-five years ago. Den Rest des Beitrags lesen »

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Why protests are so common in China

Posted by hkarner - 7. Oktober 2018

Date: 04-10-2018
Source: The Economist

They are rarely about politics, but they are evidence of social stress

THE last tweet sent by Lu Yuyu before his arrest two years ago was typically terse. “Monday June 13th 2016, 94 incidents” it read. Appended was a link to a page on his Blogspot website (newsworthknowingcn) listing details of those cases. They included a protest by more than 100 parents complaining about a local-government decision to make their children attend a distant school instead of a nearby one; another by dozens of farmers enraged by the seizure of their land by village officials; and a demonstration in Beijing by around 2,100 ex-servicemen demanding better benefits.

For his painstaking efforts to catalogue unrest in China—Mr Lu and his girlfriend had recorded more than 70,000 outbreaks in the three years before he was seized—the activist was found guilty last year by a court in Yunnan province of “picking quarrels and causing trouble”. He was given a four-year jail sentence. Den Rest des Beitrags lesen »

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